Penal code imposes criminal liability for violation of IP rights

(VEN) - Articles 225 and 226 of the revised Penal Code that came into force in January reflect the government’s determination to battle the infringement of copyright and related rights, including software copyrights. With the strict penalties set out in the revised Penal Code, businesses need to urgently review the use of software in their organizations and take timely action in order to avoid serious damage to their prestige and finances.

Computer software

In recent years, intellectual property rights (IPR) have been constantly strengthened and improved, enhancing the effectiveness of enforcement and protection activities.

The revised Penal Code has formalized the criminal liability of legal persons for IPR breaches for the first time. This is a major step forward in closing the gap with the legal norms of advanced countries, but in the meantime also presents Vietnamese businesses with many compliance challenges.

Gary Gan, director of Compliance Programs at BSA Asia-Pacific, said Vietnam’s rate of unlicensed software installation is one of the highest in the Asia-Pacific region at 78 percent. Asia-Pacific countries with low rates of unlicensed software installation include New Zealand at 18 percent and the US at 17 percent. Gan spoke at a meeting on IPR enforcement in Hanoi last month.

Computer software ownership is one of the areas in which infringements are the most common in Vietnam.

In 2017, authorities inspected software copyrights in 63 companies, testing 2,472 computers. The audit found some 54 firms involved in duplicating computer software programs without the rightful owners’ consent and fined them more than VND1.6 billion. Early this year, inspectors scrutinized compliance with existing laws on computer software copyright at 26 companies and issued administrative fines worth of VND750 million.

Trade agreements

The IPR enforcement, including the use of penal measures, has become an important part of the negotiations on new-generation free trade agreements. As Vietnam increases free trade agreements with its leading partners, such as the US, Japan and the European Union, the country must take this issue seriously.

Gary Gan recommended businesses make use of software asset management models to ensure that only legitimate and licensed software is installed and used within their organizations.

Violations of Articles 225 and 226 of the revised Penal Code on IPR infringement carry fines and a suspension of operations for a period of six months to two years. Violators also face a ban on operating in certain areas or raising capital for a period of one to three years.